UK 'must act to solve games industry brain drain'

Britain must do more to nurture a more competitive games industry if it is to prevent key talent moving overseas.

That is one of the conclusions from a recent study conducted by Tiga, the trade association for the UK’s independent computer game developers.

It says worrying numbers of key talent are leaving the UK for countries offering more favourable employment options.

It calls for tax subsidies similar to those found abroad to be introduced.

“We used to be a net importer of brains,” Jason Kingsley, chief executive of developer Rebellion, a Tiga member, told the BBC.

“People used to come here to work in the games sector. Now people are thinking Canada’s a good place to go to.

“Canada spends a lot of money marketing itself, positioning itself.”

The study found that some 18% of companies reported employees leaving UK firms to work abroad.

‘Thousand cuts’

Not an enormous number, Mr Kingsley said, but the lack of emerging companies and imported talent shows a truer, more worrying picture.

“It’s a situation where – if you were going to start up a company and you analyse all the different locations in the world for stability, quality of life – you would end up saying ‘let’s set it up in – probably – Canada’.

“It’s a death by a thousand cuts.”

On average, non-UK citizens make up just 11% of the average UK computer game company’s workforce.

Tiga’s head, Richard Wilson, blames this on added government subsidies overseas providing bigger salaries and the temptation of working on bigger-budget games.

“Independent research found that on average Canadian studios, because of the tax benefits they were getting, they were getting benefits worth 23% of their turnover,” Mr Wilson said.

“When it comes to trying to attract global investment, the US, Canada and France are at an advantage,” Mr Wilson said.

In the UK, developers are given tax credits for efforts in research and development into technological advancements, but not games production itself.

While welcome, the research tax credits are considered by many to be overly complicated, with 70% of developers saying more “liberal” tax credits would be helpful.

According to the survey, 62% of companies do not have a specific budget set aside for research, while 82% said they did not file for any patents in the past year.

“The government is committed to making the UK the best place to start, finance and grow a business and particularly wants to make the UK an attractive location for innovative industries,” said a Treasury spokesman.

“Both the Patent Box and Research & Development credits contribute to this, and the cuts to the main rate of corporation tax benefit all businesses.”

Self-publishers

The Tiga research also charted the growing trend for self-publishing and, within it, an accelerating move towards portable technology like the iPhone.

The study says 47% of companies are now self-publishing on various platforms such as Apple’s App Store and Steam.

For the first time in the annual survey’s three year history, Apple’s was shown to be the platform being used by the largest number – 67% – of UK independent games developers.

Until now, the most widely utilised platform had been the PC.

Also on the increase are Facebook games – again published directly by games developers.

Tiga expects that these newer distribution channels will see an end to the high rate of cancelled projects.

A fifth of firms said they had worked on a game which had been cancelled in the past year.

Tiga argue that the possibility to be the “master of your own destiny” by self-publishing is causing a dramatic shift in developers’ priorities.

“Back in 2008, we asked who games developers’ most important customers were. 71% said publishers,” said Mr Wilson.

“But in 2011 that has fallen to 37%. I think that is interesting. Clearly global publishers are important, but their relative importance has declined.”

Traditional retail channels are said to still make up about 50% of revenues for games makers, but other methods, such as subscription or microtransactions, are gaining ground.

In-game advertising appeared to have gained minimal traction – 54% of firms said they do not utilise it in their titles.

The Tiga report surveyed 104 development firms of varying sizes.

They ranged from small businesses hiring less than 10 people, to large firms with over 250 staff. (Dave Lee/BBC News)